Utilities, regulators discuss carbon-emissions rules

NORTH LITTLE ROCK — Arkansas utility executives met with state regulators and environmentalists Wednesday to begin organizing a plan for how to address new federal rules that will require the state to cut its climate-warming air pollution by nearly 45 percent by 2030.

The Arkansas Department of Environmental Quality and state Public Service Commission called the meeting to discuss coming rules being imposed by the U.S. Environmental Protection Agency. Participants said the EPA appears to be targeting coal-fired plants, particularly older ones.

ADEQ Director Teresa Marks said the state has a broad portfolio of fuel sources that power its electric generation plants: coal, natural gas, nuclear and hydroelectric. She said it will be a balancing act to adjust outputs and enact energy efficiency measures to meet EPA requirements.

"We have to determine where we get the most bang for our buck to meet the environmental goals and get to the [new federal] standard," Marks said.

The state is home to two regional electrical transmission organizations — Southwest Power Pool and Midcontinent Independent System Operator. Each manages the electric grid for utilities in multiple states.

Lanny Nickel, a vice president at Little Rock-based Southwest Power Pool, suggested a regional approach of working with other states.

"Whatever we do in Arkansas is going to affect states around you, and other states' [decisions] will affect Arkansas," Nickel said.

MISO regulatory adviser Chad Allen said it helps that the EPA is allowing states to develop their own plans, which will offer flexibility for them to work together. The EPA will step in and create plans for states that don't address the proposed regulations on their own.

Entergy Corp. attorney Chuck Barlow said the electricity supplier expects the regulations to be challenged in court. Entergy has four older coal-fired plants in Arkansas spread among two sites.

"There is no reason to pretend this rule is about something other than shutting coal plants," Barlow said.

He and other utility representatives expressed frustration that the rule proposal won't give utilities credit for upgrades and other work that has already cut emissions, or credit for nuclear-generated power, which produces no carbon emissions.

Audubon Arkansas president Brett Kincaid cautioned that utilities shouldn't proceed slowly because they expect the rule proposal to be the target of a court challenge. He said states that didn't prepare to implement the Affordable Care Act were at a disadvantage after the U.S. Supreme Court upheld the health overhaul law.

The group meets next on Aug. 27. Marks said she wants participants to prepare information on the economic benefits of the proposed rule, such as jobs that would be created as utilities develop energy efficiency methods and new sources of renewable energy. She also wants them to provide a better idea of the costs that will be involved in complying. Those costs are to be passed along to consumers.

Glen Hooks, president of the Sierra Club's Arkansas chapter, said there are indirect costs from older coal plants, which he said contribute to asthma, heart disease and other ailments.

"Those are costs we all bear," Hooks said. "That's not on your power bill."

Hooks said he wants coal-fired power plants built in the 1970s and early 1980s shut down, adding they're near the end of their service time anyway.